What Happens If I Miss an MTD Quarterly Deadline?
The penalty points system, the 2026/27 soft landing, and what to do if you're already late.
How the penalty points system works
Rather than fining you for every late submission, MTD uses a penalty points system similar to speeding points on a driving licence. Each missed quarterly update earns you a point. Once you reach the threshold for your submission frequency, a fixed penalty applies — and further missed deadlines after that trigger additional fixed penalties.
The 2026/27 soft landing
HMRC has confirmed that taxpayers newly required to join MTD for Income Tax from April 2026 won't receive penalty points for missed quarterly update deadlines during their first year. This gives people time to get used to the new quarterly rhythm without immediate penalty risk.
Important: this soft landing covers quarterly updates only — it does not extend to the Final Declaration, which is still due by the usual 31 January deadline with standard late filing penalties applying if missed.
What still applies even during the soft landing
- Interest still accrues on any tax paid late, regardless of penalty points
- The Final Declaration deadline (31 January) is unaffected by the soft landing
- Points reset after a period of consistent on-time submission, but missing deadlines still creates admin headaches and risk of errors piling up
Worked example
Amir misses his first quarterly update in his first year of mandatory MTD, during the 2026/27 soft landing period. No penalty point is issued. However, he still needs to catch up the submission as soon as possible, and his Final Declaration in January is unaffected by the soft landing — it's due on the normal 31 January deadline regardless.
What to do if you're already late
- Submit the missed quarterly update as soon as you can — don't wait for the next one
- Check whether the 2026/27 soft landing applies to your situation
- Set up reminders or use accounting software with automatic deadline alerts to avoid repeat misses
Sources: GOV.UK — Making Tax Digital for Income Tax. This page is general guidance, not personalised tax advice.
Frequently asked questions
No, MTD uses a points-based system. A fixed penalty only applies once you reach the points threshold.
No penalty points issued for missed quarterly updates during the first year for taxpayers newly required to join from April 2026.
No, the Final Declaration is still due by 31 January with standard late filing penalties applying if missed.
Submit it as soon as possible, check if the soft landing applies, and set up reminders for future deadlines.